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Trahan v. Trahan6/7/2002
CERTIFIED FOR PUBLICATION
INTRODUCTION
Appellants-moving parties Jeffrey and David Trahan and respondents-purchasing parties Patrick and Timothy Trahan are the sole shareholders of Trahan Bros., Inc., a closely held corporation. Appellants together own 50 percent of the shares, as do respondents. Appellants sought to dissolve the corporation and respondents thereafter exercised their statutory right under Corporations Code section 2000 to prevent dissolution by electing to purchase appellants' shares at the statutorily mandated fair value. Appellants appeal from a decree of the Marin County Superior Court confirming the appraiser's award and providing that Trahan Bros., Inc. will be dissolved unless the corporation and/or respondents purchase appellants' share in the corporation for a sum equal to or greater than that determined by the award of the appraiser, in this case negative $82,243.50. Appellants argue that the superior court's confirmation of the appraiser's determination of the fair value of their Trahan Bros., Inc. shares was erroneous as a matter of law where the appraiser refused to include in her valuation of the corporation certain existing but uncompleted contracts, which according to the appraiser would bring the corporation estimated future gross profits of more than $650,000.
SECTION 2000
This appeal is from a special proceeding conducted pursuant to section 2000 and is expressly authorized by that statute. (ยง 2000, subd. (c).) We begin with the statute, which provides in pertinent part:
"(a) . . . n any proceeding for voluntary dissolution initiated by the vote of shareholders representing only 50 percent of the voting power, the corporation or, if it does not elect to purchase, the holders of 50 percent or more of the voting power of the corporation (the `purchasing parties') may avoid the dissolution of the corporation and the appointment of any receiver by purchasing for cash the shares owned . . . by the shareholders so initiating the proceeding (the `moving parties') at their fair value. The fair value shall be determined on the basis of the liquidation value as of the valuation date but taking into account the possibility, if any, of sale of the entire business as a going concern in a liquidation. . . . [Italics added.]
"(b) If the purchasing parties (1) elect to purchase shares owned by the moving parties, and (2) are unable to agree with the moving parties upon the fair value of such shares, and (3) give bond with sufficient security to pay the estimated reasonable expenses (including attorneys' fees) of the moving parties if such expenses are recoverable under subdivision (c), the court upon application of the purchasing parties, either in the pending action or in a proceeding initiated . . . by the purchasing parties in the case of a voluntary election to wind up and dissolve, shall stay the winding up and dissolution proceeding and shall proceed to ascertain and fix the fair value of the shares owned by the moving parties.
"(c) The court shall appoint three disinterested appraisers to appraise the fair value of the shares owned by the moving parties, and shall make an order referring the matter to the appraisers so appointed for the purpose of ascertaining such value. The order shall prescribe the time and manner of producing evidence, if evidence is required. The award of the appraisers or of a majority of them, when confirmed by the court shall be final and conclusive upon all parties. The court shall enter a decree which shall provide in the alternative for winding up and dissolution of the corporation unless payment is made for the shares within the time specified by the decree. If the pu
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